Mozambique says Renamo ambush kills one, injures 10

* Bus travelling between towns burned by attackers

* State media blames Renamo for attack

* Former rebel group has abandoned peace pact

By Manuel Mucari

MAPUTO, Oct (KOSDAQ: 039200.KQ - news) 26 (Reuters) - Suspected Renamo guerrillas ambushed a passenger minibus in central Mozambique on Saturday, killing one person and injuring 10 more in an attack condemned by President Armando Guebuza, state media said.

Fears of hit-and-run attacks by armed partisans of Renamo opposition leader Afonso Dhlakama have increased after the army overran Dhlakama's base in central Sofala province on Monday, forcing him to flee into the bush.

Former rebel group Renamo fought a 16-year civil war against the ruling Frelimo party which ended in a 1992 peace pact that established multi-party politics. Renamo has lost every election since 1992 and Dhlakama's party, which is demanding electoral reforms, said on Monday it was abandoning the peace agreement.

The latest fighting follows Renamo raids in April and June in Sofala province. It is taking place several hundred kilometres (miles) north of the capital Maputo in a rural province, but has raised concerns that the country could slip back into a wider conflict that would derail a coal and offshore gas investment boom that has boosted economic growth.

The state news agency AIM said President Guebuza condemned Saturday's attack on the minibus travelling between Machanga and the port of Beira in Sofala province. The bus was burned out and two other civilian vehicles were hit in the ambush, AIM said.

Renamo, which has said it does not want a return to all-out war, did not immediately claim the ambush. It said this week one of Dhlakama's top aides, former rebel and Renamo member of parliament Armindo Milaco, was killed in the raid by government troops on Dhlakama's Sathunjira camp on Monday.

Dhlakama is in hiding in an undisclosed location and Renamo spokesmen say he is well.

AIM quoted Guebuza's spokesman Edson Macuacua as saying the Mozambican president was still open to holding talks with the Renamo leader and appealed to him to come forward. "The only solution to any difference is dialogue," Macuacua said.

The United Nations, former colonial ruler Portugal, the Catholic Church and foreign donor governments including the United States have all called on Frelimo and Renamo to negotiate their differences and avoid a return to war.

Mozambique's economy is expected to grow 7 percent this year - one of the fastest in Africa - and investors such as Brazil's Vale, London-listed Rio Tinto (Xetra: 855018 - news) , Italy's Eni (Milan: ENI.MI - news) and U.S. oil firm Anadarko have been developing some of the world's largest untapped coal and gas reserves there.

Renamo, which still holds 51 seats in the 250-member parliament, accuses Guebuza and his party of monopolising political and economic power in the country, where more than half the population still lives in poverty. It is demanding an overhaul of what it says is a flawed electoral system.

The opposition group says it will boycott upcoming municipal elections on Nov. 20 and has threatened to disrupt voting.